INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2018

Components of income (loss) before income taxes

The components of continuing operations (loss) income before income taxes are as follows:



	Fiscal Years
	2018			2017		2016
	(Dollars in thousands)
(Loss) income before income taxes:
U.S.	$	(10,251	)	$	4,652	$	16,305
International	6,703			3,676		1,943
	$	(3,548	)	$	8,328	$	18,248

Provision (benefit) for income taxes

The (benefit) provision for income taxes consists of:



	Fiscal Years
	2018			2017		2016
	(Dollars in thousands)
Current:
U.S.	$	2,151		$	994	$	819
International	1,894			268		1,207
Deferred:
U.S.	(69,350		)	7,901		6,997
International	(129		)	61		26
	$	(65,434	)	$	9,224	$	9,049

Provision for income taxes, reconciliation to applicable U.S. statutory rate

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory rate to earnings (loss) before income taxes, as a result of the following:



	Fiscal Years
	2018		2017		2016
U.S. statutory rate	28.0	%	35.0	%	35.0	%
State income taxes, net of federal income tax benefit	37.6		6.9		3.9
Valuation allowance (1)	1,532.3		73.4		35.6
Foreign income taxes at other than U.S. rates	(1.3	)	(3.9	)	(0.3	)
Officer life insurance	(3.2	)	(5.6	)	(5.2	)
Work Opportunity and Welfare-to-Work Tax Credits	43.7		(19.1	)	(16.9	)
Deferred tax rate remeasurement	296.4		—		—
FIN48 - Uncertain tax positions	(45.8	)	—		—
Stock-based compensation	(45.4	)	17.9		—
Other, net (2)	2.0		6.2		(2.5	)
	1,844.3	%	110.8	%	49.6	%

_______________________________________________________________________________

(1) See Note 1 to the Consolidated Financial Statements.

(2) The 2.0% of Other, net in fiscal year 2018 does not include the rate impact of any items in excess of 5% of computed tax.

Components of the net deferred tax assets and liabilities

The components of the net deferred tax assets and liabilities are as follows:



	June 30,
	2018			2017
	(Dollars in thousands)
Deferred tax assets:
Deferred rent	$	5,251		$	13,581
Payroll and payroll related costs	14,083			24,519
Net operating loss carryforwards	41,570			28,378
Tax credit carryforwards	35,102			32,852
Inventories	1,103			1,930
Fixed assets	1,036			6,419
Accrued advertising	2,211			2,723
Insurance	1,893			4,153
Other	13,185			7,499
Subtotal	$	115,434		$	122,054
Valuation allowance	(67,912		)	(119,082		)
Total deferred tax assets	$	47,522		$	2,972
Deferred tax liabilities:
Goodwill and intangibles	$	(72,670	)	$	(103,761	)
Other	(7,081		)	(7,398		)
Total deferred tax liabilities	$	(79,751	)	$	(111,159	)
Net deferred tax liability	$	(32,229	)	$	(108,187	)

Unrecognized tax benefits

A rollforward of the unrecognized tax benefits is as follows:



	Fiscal Years
	2018			2017			2016
	(Dollars in thousands)
Balance at beginning of period	$	1,388		$	1,357		$	1,496
Additions based on tax positions related to the current year	553			259			138
Additions based on tax positions of prior years	1,608			80			170
Reductions on tax positions related to the expiration of the statute of limitations	(177		)	(179		)	(207		)
Settlements	(345		)	(129		)	(240		)
Balance at end of period	$	3,027		$	1,388		$	1,357